For our upcoming Celebrities issue, FORBES estimates Donald’s
licensing income to be approximately $60 million. This includes
earnings from books, ties, cuff links, mattresses, speeches,
Apprentice producer fees and royalties, and earnings from the
Miss USA, Miss Teen USA and Miss Universe. This does not include
any of the licensing deals from real estate, which we are in the
process of investigating. By such estimate, Donald’s brand is
worth $120 million. Note that the number will likely rise by a
few hundred million when we account for his real estate licensing
earnings.

I’m not going to dispute that $60 million number because again, I
don’t care that much. What I would like to dispute is how
they get from $60 million/year in non-real estate licensing
income to a $120 million valuation for the brand. This is
not exactly rocket science. If you look at the $60 million
as a simple stream of cash flows, pick a discount rate, and say
it lasts 10 years (not totally unreasonable), and discount it
back to present value, the value of the brand is around $350-$400
million.

If you jack the discount rate up to 15%, assume each successive
year that his licensing revenue is going to drop by 25% (I think
an extreme assumption), that annuity stream is still worth over
$225 million! Even if we only assume cash flows will last
for 5 years instead of 10 (using the same, very conservative
assumptions), the value of the $60 million/year comes out to over
$130 million!

Where Forbes gets $120 million from $60 million/year is really
beyond me. I’m not an intellectual property valuation
expert, but if I could buy all the licensing rights to The
Donald’s various crap collections for $120
million – and I can’t believe I’m actually saying this – I’d jump
at the chance!

This is to say nothing of his various real estate holdings and
real-estate licensing income. I’m not even going to attempt
to ballpark either of those numbers, since they are not easy to
find, and taking Donald’s word for it would be akin to taking
ethics advice from
Charles Rangel. The numbers may sound good, but they might be
completely made-up.